InDaily

Adelaide's independent news

Support

Santos shares boosted by improved outlook

Business

Santos has lifted its full year production and sales guidance after higher liquefied natural gas prices contributed to an improved quarterly performance.

Comments
Comments Print article

The part-owner of the Gladstone LNG project achieved total sales growth of 12 per cent in three months to June to $US769 million, which Royal Bank of Canada analyst Ben Wilson said was above RBC’s forecast of $US692 million.

Improved sales revenue and volumes were primarily due to higher LNG prices and the timing of deliveries, Santos said in its quarterly report.

The Adelaide-headquartered giant now expects to produce between 57 and 60 million barrels of oil equivalent (mmboe) in 2017, an improvement on its previous guidance of 55 to 60 mmboe.

Full year sales are expected to be between 75 and 80 mmboe, up from its previous target of range of 73 to 80 mmboe.

The improved forecasts sent Santos shares higher, up 22.5 cents, or 7.45 per cent, to $3.245 by 1205 AEST.

Santos has also lowered its forecasts for upstream production costs, to between $US8 and $US8.25 per barrel of oil equivalent (boe), down from its previous forecast of between $US8 and $US8.50.

Wilson said the strong performance of the Gladstone LNG project as well as a reduction in costs and debt allowed that improved forecast.

“The company continues to make progress on the reduction in free cash with cash conversion coming in ahead of our forecasts,” he said.

Santos managing director and chief executive Kevin Gallagher said more efficient, lower cost operations had enabled Santos to increase drilling activity in both the Cooper Basin and at its Gladstone LNG operations.

“Our forecast free cash flow breakeven for 2017 now sits at US$33 per barrel, well below the US$47 per barrel at the beginning of 2016,” he said.

Santos’ net debt of US$2.9 billion is down from $US3.5 billion 12 months ago.

– AAP

We value local independent journalism. We hope you do too.

InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.

Powered by PressPatron

Comments

Show comments Hide comments
Will my comment be published? Read the guidelines.

More Business stories

Loading next article

Subscribe to InDaily – it’s free!

South Australia’s locally owned, independent source of digital news.

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe free here

*Terms and conditions apply

Welcome back!

Did you know it’s FREE to subscribe?

Subscribe now and go in the monthly draw* for your chance to WIN a $100 voucher!

Subscribe

*Terms and conditions apply